Re:Terrible things I'd do with your money
by jedberg on Friday April 15, 2022 @05:00PM
(#31045770)
Most risk is not quantifiable like that. Very few things are as clear cut as gambling. Most risk is in the form of "should I try to swim across this rushing river or risk going downstream to look for a bridge".
That risk isn't quantifiable. But if you're in a national park, you know there is a good chance there is a bridge, so you pattern match what you know about national parks and decide that looking for a bridge is less risky, knowing your priors.
VCs operate the same way. They know that in the past they funded two founders from MIT making a marketplace, so they are far more likely to put money into that again than something from a solo female founder who never went to college.
That risk isn't quantifiable. But if you're in a national park, you know there is a good chance there is a bridge, so you pattern match what you know about national parks and decide that looking for a bridge is less risky, knowing your priors.
VCs operate the same way. They know that in the past they funded two founders from MIT making a marketplace, so they are far more likely to put money into that again than something from a solo female founder who never went to college.
That's why I say they are risk averse.